MTA bailout falls short; threat of service cuts

December 8, 2009 7:48:26 AM PST

Eyewitness News Team

ALBANY, N.Y. --

The bailout plan that was supposed to save the MTA is apparently not getting the job done. The agency still has a budget shortfall of more than $350 million -- and that could lead to some major service cuts.

The MTA board was notified in a memo on Monday that they face an almost $350 million deficit in their 2009 fiscal year. The state cut $143 million from the current budget last week as it tries to close its deficit. On top of that, the revenue from the payroll tax that went into affect in March is going to be off by 20 percent. The tax was supposed to bring in $1 billion for the agency this year, but the final number appears to be closer to $800 million.

"The erosion in revenues from the rescue plan is so significant that inevitably there are going to be serious impacts on the budget that we put out next week, said MTA Spokesman Jeremy Soffin.

Since there's no way for the MTA to cut $350 million over the final two weeks of the fiscal year, they are going to roll the deficit over to 2010.

The New York Times reports that MTA Chairman Jay H. Walder says he is not contemplating a fare increase for 2010. That means the board will likely cut services, but at this point, an MTA spokesman says it's impossible to know where the cuts will come from.

The updated 2010 budget will be presented to the finance committee next Monday and voted on on Wednesday. Since the budget must be balanced by the time it's presented, the agency has one week to work out the specific cuts

Straphangers have been down these tracks before and subway riders like Vicki Boyle don't like what they're hearing.

"There has to be mismanagement somewhere," she said.

Gene Russianoff, the head of the Straphanger's Campaign, says fare hikes and service cuts should not be an option.

"I'm hoping when the smoke clears the promises are kept," he said.

But state budget office spokesman Matt Anderson says that the MTA, like state government, must do what necessary during hard economic times.

"During a period of unprecedented fiscal crisis that is affecting all levels of government, the MTA, like the state, must prudently manage reductions in available resources," he said.

On Nov. 18, the MTA released its "final proposed" budget for 2010, which had no fare increases or service reductions.

Walder stated then that the MTA foresaw "increased stability," but added the "MTA remains in a very fragile position with a number of risks on the horizon. ... the bottom line is that there is no more money for us in Albany, and we will learn to do more with the funding we have."

In June, the MTA raised the price of a subway ride from $2 to $2.25. It was poised to raise fares by twice as much before the state Legislature approved a $2.26 billion bailout, but it only identified funding for the first two years of the MTA's $30 billion five-year capital plan.

Lawmakers rejected proposals to charge tolls for driving across East River bridges to help fund the agency.

The MTA operates the New York City subway, Long Island Rail Road, Metro-North Railroad and buses in the city and Long Island, a transit system that carries more than 8 million riders on a typical weekday. More than 300 million vehicles a year use its bridges and tunnels.